BANGALORE: The budget proposal to increase lifetime tax (LTT) on private vehicles by 1 to 2 per cent that has come close on the heels of a hike in fuel prices has dealt a double blow on those planning to buy new vehicles.
Said Ramesh Gowda, who is into dealing stationary, and intended to buy a small car, “Now I will have to think twice before buying the new car. Car manufacturers have already increased the prices from January and again after the Union budget. The cost will again go up after one per cent increase in LTT. It is better to use my old two-wheeler.”
Similarly, two-wheelers will also cost at least Rs. 1,000 more. Chief Minister B.S. Yeddyurappa has proposed to increase the lifetime tax on two-wheelers by two per cent — from eight per cent to 10 per cent on two-wheelers with selling price less than Rs. 50,000 and from 10 per cent to 12 per cent with selling price above Rs. 50,000.
The lifetime tax on four-wheelers is proposed to be increased from 12 per cent to 13 per cent for vehicles with selling price less than Rs. 5 lakh; 13 per cent to 14 per cent with selling price between Rs. 5 lakh and Rs. 10 lakh; 16 per cent to 17 per cent with selling price between Rs. 10 lakh and Rs. 20 lakh and from 16 per cent to 18 per cent for vehicles with selling price above Rs. 20 lakh.
Reacting to the proposal, a four-wheeler dealer said since the proposals will come into effect from April 1, the business this month will increase. “We are certain to cross this month's target. From next month onwards, we'll have to wait and watch,” he said.
He felt the proposed increase will definitely have a bearing on the buying interest of a customer.